Asian Stocks Rise on Fed Minutes as BOJ Maintains Policy Stance

  • Australia bank shares push index to three-week high in Sydney
  • Bank of Japan keeps policy unchanged after entering recession

Asian stocks rose after minutes from the most recent Federal Reserve meeting showed policy makers’ faith in the world’s biggest economy, with officials saying the pace of any rate increases will be gradual.

The MSCI Asia Pacific Index advanced 1.6 percent to 133.57 at 4:02 p.m. Hong Kong time. The gauge has rallied 10 percent from a two-year low in September as investors prepare for the first U.S. interest-rate increase since 2006. In the statement following their October gathering, Fed policy makers made it clear that a rise would be considered at the Dec. 15-16 meeting.

“The pace of the rise is what’s much more important than the rate rise itself,” said Angus Gluskie, a managing director who oversees $550 million at White Funds Management in Sydney. “If a rise occurs slowly, then markets, investors and consumers all have time to respond to it and adjust accordingly. That’s the ideal circumstance and that’s certainly what the Fed is trying to achieve.”

Japan’s Topix index advanced 0.9 percent. The BOJ’s decision to keep already unprecedented stimulus unchanged was forecast by all 41 economists in a Bloomberg survey and comes days after a report showing Japan fell back into a recession in the six months through September. Prices fell in August and September.

“They want the Fed to kind of do the work for them,” Eric Liu, head of research at Vanda Securities Ltd., told Bloomberg TV in Hong Kong. “They want to see what the Fed’s got in December and how currencies react.”

OzForex Surges

South Korea’s Kospi index rose 1.3 percent and New Zealand’s NZX 50 Index added 0.3 percent. Australia’s S&P/ASX 200 Index gained 2.1 percent to the highest level since Oct. 29, led by lenders. Westpac Banking Corp. added 2.6 percent and Commonwealth Bank of Australia advanced 1.7 percent.

OzForex Group Ltd. surged 30 percent after Western Union Co. offered as much as A$888 million ($632 million) in cash for the provider of online international payment services whose brands include UKForex and USForex.

James Hardie Industries Plc slumped 7.5 percent, among the largest declines on the MSCI Asia Pacific Index, after the building products manufacturer cut its profit forecast, citing an uncertain U.S. housing market.

Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index of mainland companies both climbed 1.4 percent. Energy and financial companies were among the best performers, with China Petroleum & Chemical Corp. and China Construction Bank Corp. gaining at least 2.2 percent. The Shanghai Composite Index added 1.4 percent.

Foreign Selloff

Foreign investors have recently been offloading mainland stocks through the Hong Kong-Shanghai stocks link, which recorded 21 straight sessions of net sales until Wednesday. The stocks connect celebrated its one-year anniversary this week.

Hong Kong Exchanges & Clearing Ltd. plans to introduce futures tracking the valuation gap between mainland Chinese shares and those in Hong Kong. The bourse operator will start offering the contracts in the first quarter of 2016, Kevin Rideout, head of business development at HKEx, said in Singapore on Thursday. The Hang Seng China AH Premium Index, which tracks the price differences between dual-listed stocks, shows mainland shares are currently 38 percent more expensive than their Hong Kong equivalents.

E-mini futures on the Standard & Poor’s 500 Index added 0.2 percent after the underlying gauge rose 1.6 percent on Wednesday, the most in four weeks, as gains among banks and biotechnology companies led the rally.

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